Toyota 2015 Annual Report Download - page 178

TOYOTA MOTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The accounting for deferred tax assets represents Toyota’s current best estimate based on all available
evidence. Unanticipated events or changes could result in re-evaluating the realizability of deferred tax assets.
Operating loss carryforwards for tax purposes as of March 31, 2016 in Japan and foreign countries were
¥22,266 million and ¥613,285 million, respectively, and are available as an offset against future taxable income.
The majority of these carryforwards in Japan and foreign countries expire in years 2017 to 2025 and expire in
years 2017 to 2036, respectively. Tax credit carryforwards as of March 31, 2016 in Japan and foreign countries
were ¥1,137 million and ¥21,550 million, respectively, and the majority of these carryforwards in Japan and
foreign countries expire in years 2017 to 2019 and expire in years 2017 to 2035, respectively.
The valuation allowance mainly relates to deferred tax assets of operating loss and foreign tax credit
carryforwards for tax purposes that are not more-likely-than-not to be realized. The net changes in the total
valuation allowance for deferred tax assets for the years ended March 31, 2014, 2015 and 2016 consist of the
following:
Yen in millions
For the years ended March 31,
2014 2015 2016
Valuation allowance at beginning of year ............................... 284,835 189,894 169,811
Additions ..................................................... 23,390 34,485 33,243
Deductions ................................................... (128,928) (50,247) (43,723)
Other ........................................................ 10,597 (4,321) (7,666)
Valuation allowance at end of year ..................................... 189,894 169,811 151,665
“Other” includes the impact of consolidation and deconsolidation of certain entities due to changes in
ownership interest and currency translation adjustments during the years ended March 31, 2014, 2015 and 2016.
Because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not
expected to be remitted in the foreseeable future, management has made no provision for income taxes on those
undistributed earnings aggregating ¥3,348,031 million as of March 31, 2016. Toyota estimates an additional tax
provision of ¥130,615 million would be required if the full amount of those undistributed earnings were remitted.
A summary of the gross unrecognized tax benefits changes for the years ended March 31, 2014, 2015 and
2016 is as follows:
Yen in millions
For the years ended March 31,
2014 2015 2016
Balance at beginning of year .......................................... 22,447 19,393 13,644
Additions based on tax positions related to the current year ................. 310 593 1,001
Additions for tax positions of prior years ................................ 491 94,852 6,378
Reductions for tax positions of prior years ............................... (1,273) (4,015) (77)
Reductions for tax positions related to lapse of statute of limitations .......... — (58) (7)
Reductions for settlements ........................................... (3,771) (98,929) (427)
Other ............................................................ 1,189 1,808 (1,262)
Balance at end of year ........................................... 19,393 13,644 19,250
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